Monthly equity loan interest from year 6, how it rises and what repaying would cost.
| Loan year | Rate | Monthly | Yearly |
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Estimate only, check with your Help to Buy administrator. Rates rise each April, so this tool applies one rise per loan year. Inflation is your own assumption, not a forecast. Rules checked October 2026.
This Help to Buy interest calculator is for homeowners in England with a Help to Buy: Equity Loan who have reached, or are about to reach, year 6, when interest starts. Enter the price you paid, the share you borrowed and when the loan began, and it shows your monthly interest now, the £1 fee on top, how the rate climbs each April under your scheme and what it would cost to repay the loan at today's value.
Quick answer: in year 6 you pay 1.75% a year on the equity loan you originally borrowed, in monthly instalments, plus a £1 monthly fee. A £60,000 loan costs £87.50 a month. The Help to Buy interest calculator then raises the rate each year by RPI plus 1% or CPI plus 2%.
In This Guide
What Is Help to Buy Equity Loan Interest?
Help to Buy equity loan interest is a yearly charge on the government loan you used to buy a new build home, payable from the fifth anniversary of the loan until you repay it. In plain words: monthly interest = purchase price × equity loan share still owed × interest rate ÷ 12. The rate starts at 1.75% and each year is multiplied by one plus the inflation figure plus the scheme margin.
Two points surprise most owners. The interest is worked out on the amount you borrowed, not on what the loan is worth today, so a rise in house prices does not raise it. And interest never reduces the loan: after ten years of payments you still owe the same share of your home's value. According to the GOV.UK guidance on paying equity loan interest, payments are collected monthly and the new rate is confirmed each February before it applies in April.
How to Use the Help to Buy Interest Calculator
Step 1: Enter Your Equity Loan
Pick your scheme: loans taken out up to March 2021 rise by RPI plus 1%, while the 2021 to 2023 scheme rises by CPI plus 2%. Enter the purchase price and the share you borrowed, usually 20% or up to 40% in London. If you have made a part repayment, lower the share still owed.
Step 2: Enter the Dates
The start date is the day your purchase completed, shown on your equity loan paperwork. The second date is the day you want figures for. The tool works out which loan year that falls in and, if interest has not started yet, the date it will.
Step 3: Set Inflation and Home Value
Enter the yearly RPI or CPI figure you want to assume. The 3% default is only an example, so try a few values to see the range. Add a realistic value for your home today; repaying uses a RICS valuation, so an estate agent's figure is a rough guide only.
Step 4: Read Your Results
You see this year's monthly interest and rate, the total with the £1 fee, five years of projected interest and the amount you would need to repay the loan now. The table lists the rate and the monthly and yearly cost for each of the next five loan years. If your loan is still in its interest free years, the Help to Buy interest calculator shows the date interest begins and what year 6 will cost, so you can plan a remortgage before the first payment is taken.
How Much Is Help to Buy Interest in Year 6?
Year 6 interest is 1.75% of the amount you borrowed, which is £17.50 a year for every £1,000. Worked example: Aisha bought a £300,000 flat in Milton Keynes in March 2021 with a 20% equity loan of £60,000 under the 2013 to 2021 scheme. From March 2026 she pays £60,000 × 1.75% = £1,050 a year, or £87.50 a month, plus the £1 fee. If RPI is 3%, her rate rises by 4% to 1.82%, and her monthly interest to £91.00. Over loan years 6 to 10 she would pay about £5,687 in interest while still owing 20% of her home's value.
| Equity loan borrowed | Year 6 yearly interest | Year 6 monthly interest | Year 7 monthly if rate rises 4% |
|---|---|---|---|
| £30,000 | £525 | £43.75 | £45.50 |
| £40,000 | £700 | £58.33 | £60.67 |
| £60,000 | £1,050 | £87.50 | £91.00 |
| £80,000 | £1,400 | £116.67 | £121.33 |
| £120,000 | £2,100 | £175.00 | £182.00 |
How Does Help to Buy Interest Increase Each Year?
The rate is multiplied, not added to, so a 4% rise turns 1.75% into 1.82%, not 5.75%. Every April the rate goes up by the inflation figure plus 1% on the 2013 to 2021 scheme, or plus 2% on the 2021 to 2023 scheme. The GOV.UK Help to Buy interest page sets out both rules, and the Office for National Statistics publishes the RPI and CPI figures used. Because each rise builds on the last, the cost grows faster the longer you keep the loan.
Should You Repay Your Help to Buy Loan to Stop the Interest?
Repaying stops the interest, and owners often remortgage to do it once interest starts. You repay the share of the current market value, not the original sum: Aisha's 20% of a £340,000 home is £68,000. You can also part repay in steps of at least 10% of the market value, and the interest falls with the share still owed, as the GOV.UK equity loan repayment guide explains with worked scenarios. Compare the new mortgage cost with the mortgage overpayment calculator, and test how inflation changes the real value of the debt with the inflation calculator. Use the Help to Buy interest calculator to compare years before you decide. This is an estimate, not financial advice; speak to a mortgage adviser before you remortgage. Figures checked October 2026.
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How we checked this tool: the Tools Veria Editorial Team built this tool by hand, checked it against the official rules or published standards where they apply, and tested it against worked examples. Results are estimates for planning, not personal financial or tax advice. Read our editorial policy and disclaimer, or report an error.
Frequently Asked Questions
When do you start paying interest on Help to Buy?
You start paying Help to Buy interest from the fifth anniversary of your equity loan, at the start of year 6. The first five years are interest free, although the £1 monthly management fee is due from the start.
What is the Help to Buy interest rate in year 6?
The year 6 rate is 1.75% a year on the equity loan you originally borrowed. On a £40,000 loan that is £700 a year, or £58.33 a month, plus the £1 monthly management fee.
How much does Help to Buy interest go up each year?
Each April the rate is multiplied by one plus inflation plus a margin: RPI plus 1% for the 2013 to 2021 scheme, CPI plus 2% for the 2021 to 2023 scheme. With 3% RPI, 1.75% becomes 1.82%.
Does Help to Buy interest reduce the loan?
No. Help to Buy interest payments do not reduce what you owe. You still owe the same percentage of your home's market value until you repay it in full or in part, for example by remortgaging.
Is Help to Buy interest based on the current value of my home?
No. Interest is worked out on the amount you originally borrowed, which is the purchase price times your equity loan percentage. Only repayments use the current market value of your home.
Does part repaying Help to Buy reduce the interest?
Yes. Interest is charged on the share of the loan still owed, so repaying 10% of a 20% loan halves the interest. Each part repayment must be at least 10% of your home's market value.